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  • Wed, Oct 8 2008
  • 8:52 AM » The Debate: McCain's Insane Mortgage Proposal
    Published Wed, Oct 08 2008 8:52 AM by Seeking Alpha
    Matt Cooper () submits: Well, John McCain didn't waste any time. In response to the first question of the second presidential debate, the Arizonan offered to buy back any mortgage in America that's worth more than the value of the home. Since maybe as many as 40 percent of the homes in America may be under water -- that is, the mortgage is worth more than the home -- that's quite a tall order, one that makes the $700 billion bailout/rescue plan look like bubkes. It's a stunning nationalization of mortgages, wild in its cost and implications and somewhat bizarre coming from someone who had tried to pare back Fannie Mae and Freddie Mac. I suspect in the coming days McCain will dial back the plan because it was so outlandishly expensive and such a federal intrusion into the market--not that we're still worrying about that.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:51 AM » Balance sheet of the Federal Reserve
    Published Wed, Oct 08 2008 8:51 AM by www.econbrowser.com
    I was astonished when I heard that the Fed is contemplating to $900 billion. I wanted to take another look at the ever-changing balance sheet of the Fed to see how logistically Bernanke might be able to perform such a feat. The one power that the Fed unquestionably possesses is the ability to create money. It traditionally did so by buying Treasury securities from the public, crediting the sellers' banks with newly created Federal Reserve deposits (a "liability" from the Fed's point of view), and adding the securities purchased to the Fed's asset holdings. Those newly created Federal Reserve deposits are essentially electronic credits that the banks could use to receive delivery of green cash from the Federal Reserve. The first column of the table below provides a condensed version of the Federal Reserve's balance sheet in the halcyon moments before the credit turmoil began in August 2007. By far the most important asset held by the Fed at that time was some $800 billion in Treasury securities, largely balanced on the liabilities side by a similar value for currency in circulation. Repurchase agreements at that time were used by the Fed as a vehicle to add reserves temporarily, while reverse repos entered on the liabilities side as a factor temporarily draining reserves. The residual reserve balances, after adding up all the factors supplying reserves and subtracting all the other factors absorbing reserves, were themselves a tiny number, under $7 billion. Balance sheet of the Federal Reserve. (Based on end-of-week values, in billions of dollars). Data source: Aug 8, 2007 Sep 3, 2008 Oct 1, 2008 Securities 790,820 479,726 491,121 Repos 18,750 109,000 83,000 Loans 255 198,376 587,969 &#160 &#160 Discount window &#160 &#160 255 &#160 &#160 19,089 &#160 &#160 49,566 &#160 &#160 TAF &#160 &#160 150,000 &#160 &#160 149,000 &#160 &#160 PDCF &#160 &#160 146,565 &#160 &#160...
    Click Here to Read the Full Article

    Source: www.econbrowser.com
  • 8:51 AM » Homeowners with Negative Equity
    Published Wed, Oct 08 2008 8:51 AM by Calculated Risk Blog
    From the WSJ: Housing Pain Gauge: Nearly 1 in 6 Owners 'Under Water' About 75.5 million U.S. households own the homes they live in. After a housing slump that has pushed values down 30% in some areas, roughly 12 million households, or 16%, owe more than their homes are worth, according to Moody's Economy.com. This is close to my estimate of homeowners with negative or no equity. These homeowners
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:51 AM » Vanishing Act Timeline
    Published Wed, Oct 08 2008 8:51 AM by The Big Picture
    How various firms on Wall Street are disappearing: > click for ginormous > Source: JULIE CRESWELL and BEN WHITE NYT, September 27, 2008 http://www.nytimes.com/2008/09/28/business/28lloyd.html
    Click Here to Read the Full Article

    Source: The Big Picture
  • Tue, Oct 7 2008
  • 3:49 PM » Welcome to the wonderful world of deflation
    Published Tue, Oct 07 2008 3:49 PM by feeds.feedburner.com
    This guest post is from: a veteran business journalist who writes the blog , a humorous look at marketing, business and his dog. If you’d like to submit a guest post . Like everyone else I’m relieved that gas prices are dropping. As gas prices drop so do those of a lot of other things, like food and shipping and clothes. That’s all good, right? Yeah, unless they don’t stop dropping. When that happens you have deflation and it is very bad. : “A general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending. The opposite of inflation, deflation has the side effect of increased unemployment since there is a lower level of demand in the economy.” Deflation always means hoarding because investors and buyers hold on to their money because they don’t want to invest in even the most solid of securities. Like oil. Or corn, . Gold is up for the moment, but I think that is more a sign of desperation and clinging to an old idea and won’t last. Very few folks around today know what a deflation is really like. My parents lived through the last great deflation in US history, but it was 1934 and they were too young to remember it. So if you have grandparents or great-grandparents around ask them about it. But do yourself a favor. Sit down before they start to talking. Peter Rachleff, a labor historian at Macalester College, has a . “These were industries where worker productivity was quite high, but workers were not earning back a significant share of what they were producing. So workers were increasingly turning to credit as a way to acquire consumer goods - refrigerators, vacuum cleaners, radios, and automobiles - that they were producing. And the wages never caught up. And that led to goods that were repossessed that weren’t done being paid for. That led to inventories swelling and workers being laid off or work weeks being cut, and spiral downwards then from that point...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 3:49 PM » Bank of America's Acquisitions: What Was Ken Lewis Thinking?
    Published Tue, Oct 07 2008 3:49 PM by Seeking Alpha
    submits: Bank of America (BAC) is in big trouble. Notwithstanding its own credit issues, a slowing business cycle, and horrible macro conditions, it actually paid $100 billion for acquisitions in the last 5 quarters. This company wasn't even, in my opinion, worth $100 billion in the last 5 quarters. Talk about subprime borrowing! Two of those acquisitions were the largest companies in their respective industries, along with the largest problems caused by the Asset Securitization crisis (or one could say caused by them). Merrill Lynch (MER) led Wall Street in asset value writedowns, and I don't think it was really all that aggressive in doing so. Countrywide is a gaping radioactive cesspool of liabilities and underwater assets. It actually has practically as much in REOs (dollar value) as performing mortgages. This makes it effectively a real estate company - against its will. The legal liabilities appear to be near limitless.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 3:33 PM » Office Vacancy Rate Rises Sharply
    Published Tue, Oct 07 2008 3:33 PM by Calculated Risk Blog
    From Bloomberg: New York's Top Office Vacancies Jump 43% on Layoffs Vacancies for Class A space rose to 7.7 percent in Manhattan, up from 6.9 percent in the second quarter and 5.4 percent a year ago. There's 18.5 million square feet for rent, up from 12.9million feet a year ago, according to Cushman statistics. ... Nationwide, the office vacancy rate reached 13.6 percent in the third quarter from
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 3:33 PM » Bank of America Brand Seriously Infected by Countrywide Loans
    Published Tue, Oct 07 2008 3:33 PM by loanworkout.org
    “Today, I’m announcing the biggest loan modification in American history,” California Attorney General Jerry Brown said at a press conference Monday morning. “Bank of America settled because their new entity, Countrywide, was guilty of massive irregularities.” Thanks to the California Attorney General and 10 others states AG’s massive $8.4 million settlement, Bank of America has now [...]
    Click Here to Read the Full Article

    Source: loanworkout.org
  • 10:05 AM » Lessons to Learn From Mortgage Lending in Australia
    Published Tue, Oct 07 2008 10:05 AM by Seeking Alpha
    submits: Maybe only a friendly foreigner could say this. But America needs to realize that not everyone can own a home. The American Dream of home ownership for all is a fraud. Politicians who pimped this dream created an unsustainable mortgage industry whose collapse is only surprising because it didn't happen earlier. America's mortgage industry will not recover, nor deserve to recover, unless it is prepared to challenge this politically unpalatable reality. Now, Australians -- and others -- place a high value on homeownership too. But they are aghast at the dumb things America has tolerated in pursuit of that goal. Even more dumbfounding is that nobody in Washington seems to be talking about fixing it. ~by Australian journalist
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 10:04 AM » Willem Buiter: Banking System in North Atlantic Probably Insolvent
    Published Tue, Oct 07 2008 10:04 AM by feeds.feedburner.com
    Willem Buiter has a penchant for ruffling feathers with his blunt pronouncements. He caused a firestorm at the Fed's recent Jackson Hole conference by, in his presentation, telling the central bank that it was a victim of "cognitive regulatory capture" and was excessively sensitive to the needs and special pleading of the financial services industry. Even though the hosts took umbrage, they should not have been surprised, since Buiter had been saying that sort of thing for months. Buiter lobbed another bombshell today, but because it was presented on his blog and (needless to say) the market meltdow was attention-grabbing, it appears to have gotten little note: It’s reasonable to assume that the banking system in the North Atlantic region is insolvent and would be bankrupt but for the reality of recent government bailouts and the expectation of future government bailouts. Certainly, for the system as a whole, the marked-to-market value of its assets is way below that of its liabilities. I strongly suspect that even the hold-to-maturity value of its assets is well below that of its liabilities. Although the system as a whole is broke, there are no doubt individual banks that are solvent. We may not, however be certain as to which banks are solvent and which banks are not. This is a bold, troubling, and probably accurate assessment. Note (if you read the rest of the post) that Buiter uses the term bank deliberately; he is not referring to the larger shadow banking system that has clearly run aground, but to its core, the regulated banking sector (plus, of course, its new additions, Goldman and Morgan Stanley). More important, Buiter suspects that the banks as a whole are insolvent even if they hold assets to maturity . In other words, the argument that bank distress is due in large degree to mark-to-market pricing meeting a panicked flight to quality is wishful thinking. While many readers of this blog would agree with that view, it's quite another for...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 10:03 AM » How Bad Will the Downturn Be? Stylized Facts
    Published Tue, Oct 07 2008 10:03 AM by www.econbrowser.com
    The IMF released several chapters of the ; one chapter entitled provides some insights into the ramifications of the current financial turmoil. click to Figure 4.7 from . Notes: Sources: Haver Analytics; OECD, Analytic Database; OECD, Economic Outlook (2008); and IMF staff calculations. The difference between banking-related and non-banking-related episodes is significant at a minimum of 10 percent for quarters 0, 1, 2, 3, and 4. The sample is constant for all quarters. The difference between slowdowns preceded by banking-related financial stress and slowdowns not preceded by financial stress is significant at a minimum of 10 percent for t - 6 to t + 6. The sample is constant for all quarters. So financial stress before a recession presages a statistically significantly more severe recession; the fact that it's a banking type of financial stress (as opposed to say exchange rates or interest rates) suggests that it will be even worse than otherwise. Finally, the prevalence of arm's-length finance (as compared to the bank-centric systems dominant in Europe) means that the impact will likely be even more negative in the US case. From the chapter written by Subir Lall, Roberto Cardarelli, and Selim Elekdag: Implications for the Current Crisis in the United States and Euro Area Figure 4.15 compares data for the current crisis in the United States and euro area against the medians of selected macroeconomic variables around the beginning of the six major financial stress episodes examined above and against the averages for these variables across all financial stress episodes that were followed by recessions. The current imbalances and adjustments appear generally much smaller than those for the six episodes examined here, except for U.S. residential real estate investment and the U.S. current account.23 The patterns of credit and asset prices in the United States prior to the current crisis are very similar to those for the typical financial-stress-driven recession...
    Click Here to Read the Full Article

    Source: www.econbrowser.com
  • 10:02 AM » New Jersey Wants to Charge Lenders $2,000 for Every Foreclosure
    Published Tue, Oct 07 2008 10:02 AM by www.thetruthaboutmortgage.com
    Foreclosure is never easy, and it might get a lot more painful for banks and mortgage lenders in the state of New Jersey. A new bill, the New Jersey Home Ownership Preservation Act, was approved today by the state’s budget committee by a vote of 8 to 3, which among other things, would require lenders to [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 10:01 AM » Deregulate/Reregulate
    Published Tue, Oct 07 2008 10:01 AM by The Big Picture
    Click Here to Read the Full Article

    Source: The Big Picture
  • 10:01 AM » Roubini: Fed Fiddles While Rome Burns
    Published Tue, Oct 07 2008 10:01 AM by feeds.feedburner.com
    We that neither the signing of the much-touted bailout bill, nor the dramatic increase in size of the already bulked-up Term Auction Facility (it has been enlarged six-fold in a mere two weeks) has had any impact on conditions the money markets, which are barely functioning. We noted earlier and reiterated that the Fed's latest liquidity moves have in fact been counterproductive, reinforcing the propensity of banks to rely on central banks rather than each other. We also affirmed a notion voiced by John Jansen, that the Fed and other central banks need to guarantee commercial paper and interbank loans, rather than continue to engage in indirect measures that have proven useless. The general mood is reflected in the stock markets, where the Dow took a dive to 700 points down, although (as of this wriiting) it had rebounded to a mere just shy of 500 points in negative territory, but has resumed its downward path, now 551 points down. One spur for the depth of the move was normally relentless bull pre-opening, on the Today Show, that, “Whatever money you may need for the next five years, please take it out of the stock market right now, this week." The yen has rallied nearly 4% in a mere week, another sign of an accelerated retreat from risk. Brent crude is below $85 and gold has rise $36 per ounce so far today. ( Update : reader Dwight pinged that the stock market staged a monster recovery immediately before the close, from a low of just over 9500 to 10,000. What gives? The trigger may have been the request by France for an emergency G8 meeting, but no one has even agreed!] Nouriel Roubini has weighed in even more forcefully on these issues in "" (hat tip reader Dwight). Last Friday I pointed out in my “” that we were at the point of a risk of a systemic financial meltdown with the beginning of the mother of all bank runs: stock markets gave a vote of no confidence to the Senate passage of the TARP legislation (equities down 4% on Thursday) and to the...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 10:01 AM » Lenders Lost More than $500 per Loan Last Year
    Published Tue, Oct 07 2008 10:01 AM by www.thetruthaboutmortgage.com
    Mortgage lenders lost an average of $560 on each loan they originated in 2007, up from a loss of $50 per loan in 2006, according to the latest Cost Survey from the MBA. The group noted that loan origination and ancillary fees increased on a per-loan basis, but soft volume couldn’t hold off rising production operating [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 9:45 AM » Credit Crisis: LIBOR Rate Increases
    Published Tue, Oct 07 2008 9:45 AM by Calculated Risk Blog
    From Bloomberg: Libor for Overnight Dollar Loans Jumps as Credit Freeze Deepens The London interbank offered rate, or Libor, that banks charge each other for such loans rose 157 basis points to 3.94 percent today, the British Bankers' Association said. The corresponding rate for euros climbed 22 basis points to 4.27 percent, the highest in four days. The Tokyo interbank rate stayed at the highest
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 9:45 AM » A Glimpse Into the Abyss
    Published Tue, Oct 07 2008 9:45 AM by feeds.feedburner.com
    I must confess a certain fondness for the apocalyptic sort of financial writer, provided they don't lose anchoring with reality and fall into the tinfoil hat category. Nouriel Roubini is the case example of an economist who favors a baroque, melodramatic style, and despite sounding more than a tad unhinged at points, he has proven to be the most accurate seer of our unfolding financial mess. Another writer who almost seems to relish describing how bad things can get is Ambrose Evans-Pritchard of the Telegraph. Pritchard has been proven correct, despite catcalls on this blog, in his assessment that the oil price runup was overdone and his early recognition that deflation, the product of deleveraging, and not inflation, was the pressing economic risk. Evans-Pritchard put up two articles this week, the first "" and "." Both are suitably bone chilling, First, excerpts from the EU piece: During the past week, we have tipped over the edge, into the middle of the abyss. Systemic collapse is in full train. The Netherlands has just rushed through a second, more sweeping nationalisation of Fortis. Ireland and Greece have had to rescue all their banks. Iceland is facing an Argentine denouement. The US commercial paper market is closed... The interbank lending market has seized up..... Healthy companies cannot roll over debt.... As the unflappable Warren Buffett puts it, the credit freeze is “sucking blood” out of the economy. “In my adult lifetime, I don’t think I’ve ever seen people as fearful,” he said. We are fast approaching the point of no return. The only way out of this calamitous descent is “shock and awe” on a global scale, and even that may not be enough.... Yves here. That turn of phrase is not off target. Paul Krugman has said that interventions in large liquid markets are too small to force a change in valuation by virtue of the sheer weight of buying. They instead serve as a slap in the face, to (hopefully) make investors realize that they...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • Mon, Oct 6 2008
  • 8:13 PM » Fed, Treasury mulling commercial paper support
    Published Mon, Oct 06 2008 8:13 PM by Reuters
    WASHINGTON (Reuters) - The U.S. Treasury Department and the Federal Reserve are considering additional steps to support strained commercial paper markets, a source familiar with the discussions said on Monday.
  • 8:12 PM » Roundtable discussion on the financial crisis
    Published Mon, Oct 06 2008 8:12 PM by www.econbrowser.com
    I participated on Friday with several other UCSD faculty members (including Nobel laureate Harry Markowitz) in a discussion about the current economic crisis. If you have , you can view the discussion , though I recommend fast-forwarding to skip the first 8 introductory minutes to get to the actual discussion.
    Click Here to Read the Full Article

    Source: www.econbrowser.com
  • 8:12 PM » BofA Cuts Dividend in Half, Sees Further Weakening
    Published Mon, Oct 06 2008 8:12 PM by Calculated Risk Blog
    From BofA: Bank of America Announces Third Quarter Earnings and Capital Raising Initiatives Bank of America Corporation today reported third quarter 2008 net income of $1.18 billion, or $0.15 per share, down from $3.70 billion, or $0.82 per share, a year earlier. ... The company intends to sell common stock with a target of raising $10 billion. In addition, the Board of Directors has declared a
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:12 PM » More Than 9,000 Mortgage Layoffs in Third Quarter
    Published Mon, Oct 06 2008 8:12 PM by www.thetruthaboutmortgage.com
    Mortgage industry layoffs doubled from the second quarter to the third quarter, but still remained well below the massive number of layoffs seen during the same period a year earlier, MortgageDaily reported today. During the July 1 to September 30 quarter, a total of 10,131 mortgage industry employees lost their jobs, while 996 were reported to [...]
    Click Here to Read the Full Article

    Source: www.thetruthaboutmortgage.com
  • 4:53 PM » Mall Vacancies Grow as Retailers Pack Up Shop
    Published Mon, Oct 06 2008 4:53 PM by WSJ
    Vacancy rates at U.S. malls and shopping centers continued their steep rise in the third quarter as slumping sales forced retailers to close stores.
  • 1:07 PM » Treasuries and Gold Rise as Global Credit Freeze Prompts More Bailouts
    Published Mon, Oct 06 2008 1:07 PM by feeds.feedburner.com
    In a sea of red, government bonds and are gold both rising as the world's banking system cracks under the weight of the biggest debt expansion in history. Credit Freeze Prompts New Bailouts Bloomberg is reporting . Government bonds around the world rose as stocks tumbled and the freeze in credit markets prompted new bailouts of Hypo Real Estate Holding AG and Fortis, stoking demand for the safest assets. U.S. Treasuries climbed for a fourth day, sending two-year notes to their longest winning streak in six weeks, and gains for German two-year notes drove yields to their lowest levels since March. Japanese 10-year bonds advanced for a second day, pushing yields down to the lowest level since April. Investors are piling into government bonds on concern the bailouts will fail to stem further bank failures, driving the world's biggest economies into a recession. At the same time, the short-term debt markets that provide financing to the global economy have frozen. The Libor-OIS spread, a gauge of the scarcity of cash among banks, widened to a record today. The prospect of a global economic slump has caused investors to raise bets the biggest central banks will cut interest rates. Futures on the Chicago Board of Trade show a 60 percent probability the Fed will slash its benchmark interest rate by a half-percentage point at its Oct. 29 meeting. The odds were zero a month ago. The chances of the European Central Bank reducing its main refinancing rate next month are 100 percent, up from 21.5 percent a week ago, according to a Credit Suisse Group index of derivatives. Inflation expectations as measured by the difference in yield between regular bonds and index-linked bonds fell around the world, giving added cause for policy makers to cut borrowing costs. Banking Crisis In Europe Widens For more on the European banking crisis and how it is affecting the US dollar, please see . Deflation Models In I presented my model of how I see things. Here is a small snip: Deflation...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 12:04 PM » Modern Subprime Finance 101
    Published Mon, Oct 06 2008 12:04 PM by Seeking Alpha
    submits: Nice, useful figure from The Deal on how modern finance worked to create the subprime mess, or at least how it worked up until there stop being a functioning capital market.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:42 AM » Fed to Begin Paying Interest on Reserves, Expands Loan Program
    Published Mon, Oct 06 2008 9:42 AM by Calculated Risk Blog
    From the Fed: Board announces that it will begin to pay interest on depository institutions required and excess reserve balances The Federal Reserve Board on Monday announced that it will begin to pay interest on depository institutions' required and excess reserve balances. ... The Financial Services Regulatory Relief Act of 2006 originally authorized the Federal Reserve to begin paying interest
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 9:42 AM » Bank of America Announces Nationwide Homeownership Retention Program for Countrywide Customers
    Published Mon, Oct 06 2008 9:42 AM by loanworkout.org
    Nearly 400,000 Countrywide Borrowers Could Benefit After Program Launches December 1 Nearly 400,000 Countrywide Borrowers Could Benefit After Program Launches December 1 CALABASAS, Calif., Oct. 6 /PRNewswire/ — Bank of America today announced the creation of a proactive home retention program that will systematically modify troubled mortgages with up to $8.4 billion in interest rate and principal [...]
    Click Here to Read the Full Article

    Source: loanworkout.org
  • 9:42 AM » Lehman Asked to Become a Bank, Rebuffed by Fed
    Published Mon, Oct 06 2008 9:42 AM by feeds.feedburner.com
    In light of the Fed's decision to grant Goldman Sachs and Morgan Stanley banking licenses, and the breathtaking damage of the Lehman bankruptcy, the central bank may have a bit of explaining to do as to why it turned down Lehman's petition to become a bank in July. The other side of the coin is that Lehman badly overplayed its hand in all of its efforts to stave off collapse. If they had cut a deal with the Korean Development Bank, their last, best hope of raising hard cash, the Fed might have looked more favorably upon their petition. From the: Lehman Brothers lobbied the US Federal Reserve this summer to be given access to much-needed liquidity, but was unable to convince the regulators, just two months before the Fed endorsed similar proposals from Goldman Sachs and Morgan Stanley, the Financial Times has learnt. Lehman held talks with regulators over a plan to convert to a traditional bank holding company in July. At the same time it asked the Fed to loosen the rules by which it extends credit in order to include more types of collateral, according to sources close to the firm’s discussions with the Fed. Lehman also held a round of meetings that month with Bank of America over a potential takeover and considered selling itself to other banks including Morgan Stanley, HSBC and Nomura before it eventually filed for bankruptcy. It held extensive merger talks with AIG in 2006, and solicited potential minority investors ranging from General Electric to the Abu Dhabi Investment Authority, other Middle Eastern and Asian partners and private equity firms. Yves here. This story is clearly from Lehman insiders, and some details are pretty, um, unconvincing. Considered selling itself to Morgan Stanley? That's like saying you considered dating Sharon Stone. "Considering" doesn't get you very far in the money raising game. Ditto soliciting General Electric et. al. So they made calls? Sent out a memo? If they didn't get beyond a polite meeting to...
    Click Here to Read the Full Article

    Source: feeds.feedburner.com
  • 9:25 AM » Fannie Mae forgives mortgage debt of woman who shot herself
    Published Mon, Oct 06 2008 9:25 AM by news.yahoo.com
    Fannie Mae said it is forgiving the mortgage debt of a 90-year-old woman who shot herself in the chest as sheriff's deputies attempted to evict her.
    Click Here to Read the Full Article

    Source: news.yahoo.com
  • 1:54 AM » Asia's Banking System Remains Healthy 
    Published Mon, Oct 06 2008 1:54 AM by CNBC
  • 1:53 AM » Darling plans 'big steps' to aid UK banks
    Published Mon, Oct 06 2008 1:53 AM by www.ft.com
    The chancellor is considering a dramatic taxpayer-funded recapitalisation of Britain's banks, amid signs of cross-party and central bank support for an effective part-nationalisation of the sector
  • 1:52 AM » Lehman failed to convince Fed on survival plan
    Published Mon, Oct 06 2008 1:52 AM by www.ft.com
    The US bank lobbied the Fed this summer to be given access to liquidity, but was unable to convince regulators, just two months before the Fed endorsed similar proposals from Goldman Sachs and Morgan Stanley
  • 1:51 AM » Fed under pressure to do more on credit crunch
    Published Mon, Oct 06 2008 1:51 AM by www.ft.com
    The Federal Reserve and US Treasury were on Sunday night under increasing pressure to follow passage of the $700bn financial rescue plan with further measures to shock the ailing credit markets back to life
  • 1:50 AM » Funds dry up in Golden State
    Published Mon, Oct 06 2008 1:50 AM by www.ft.com
    California's economy, which would be the eighth biggest in the world if the state was a separate country, is teetering on the brink of a financial crisis intensified by the credit crunch
  • 1:49 AM » Investors relieved - but nervous
    Published Mon, Oct 06 2008 1:49 AM by CNN
    Read full story for latest details.
  • 1:49 AM » For Most Cities, Recession Has Arrived
    Published Mon, Oct 06 2008 1:49 AM by The Big Picture
    Nice depiction of where the pain is being felt most: click for ginormous version This is obviously having a political effect: click for ginormous version Sources: BILL MARSH NYT, October 4, 2008 http://www.nytimes.com/2008/10/05/weekinreview/05marsh.html ADAM NAGOURNEY and JEFF ZELENY NYT, October 4, 2008 http://www.nytimes.com/2008/10/05/us/politics/05map.html
    Click Here to Read the Full Article

    Source: The Big Picture
  • 1:49 AM » Fannie Mae and the Financial Crisis
    Published Mon, Oct 06 2008 1:49 AM by The Big Picture
    The has a very interesting article on Fannie Mae and the current financial crisis. They do a decent job at delving into the complexities of the GSEs, and the many factors that went into the decision making at the senior level of the company. This includes pressure from clients such as Coutrywide CEO Angelo Mozilo, pressure from Congress, and the demands from investors for the company to be more aggressive. Most of all, it looks at the ongoing competitive demands of the market place that Fanny was in. The key to understanding the GSE story is grasping their role within the bigger picture of the economy and housing sector. While there are some pundits who prefer talking points over reality (, , , and all toed the GOP line) I prefer to keep all of my analyses based on the data and facts. Rather than creating historical revisions for partisan reasons, I prefer to keep it reality based. (I'm an independant, and that's how I roll). The current housing and credit crises has many, many underlying sources. Its my opinion there were two primary causes leading to the boom and bust in Housing: A nonfeasant Fed, that ignored lending standards, and ultra-low rates. This nonfeasance under Greenspan allowed banks, thrifts, and mortgage originators to engage in all manner of lending standard abrogations. We have detailed many times the I/O, 2/28, Piggy back, and Ninja type loans here. These never should have been permitted to proliferate the way they did. The most significant element were the 2/28 APRs, and their put back provision. Just about all of these gave the securitizer/repackager the right to return the loans within 6 (or 12) months if they went into default. Hence, our that the 2002-07 period was unique in the history of finance. If any of these mortgages went bad within 6 months, the undewriter was on the hook. HOW DIFFERENT WERE LENDING STANDARDS IF YOU ONLY NEED TO ENSURE THE BORROWER WOULDN'T DEFAULT FOR 6 MONTHS VERSUS FINDING BORROWERS WHO WOULDN'T DEFAULT...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 1:44 AM » Weekend Legal Frenzy Between Citigroup and Wells Fargo for Wachovia
    Published Mon, Oct 06 2008 1:44 AM by www.nytimes.com
    The epic battle engulfed two courts and pitted a cast of bankers, lawyers and federal regulators against one another.
    Click Here to Read the Full Article

    Source: www.nytimes.com
  • 1:43 AM » Citigroup Obtains Temporary Court Order Blocking Wells Fargo
    Published Mon, Oct 06 2008 1:43 AM by Calculated Risk Blog
    Press Release: Citi Granted Emergency Injunctive Relief Extending Exclusivity Agreement between Citi and Wachovia Citi tonight was granted emergency injunctive relief extending the Exclusivity Agreement between Citi and Wachovia Corp. until further order of the court. This relief was granted over the objection of Wachovia. Justice Charles Ramos of the Supreme Court of the State of New York issued
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 1:42 AM » Wachovia Battle: Appellate Court Rules for Wells Fargo
    Published Mon, Oct 06 2008 1:42 AM by Calculated Risk Blog
    The AP is reporting tonight that the Appellate Division of the New York State Supreme Court threw out the lower court order favoring Citigroup (to temporarily halt the Wells Fargo acquisition of Wachovia). (hat tip Kevin) The AP is also reporting that documents filed with the court reveal that the FDIC had informed Wachovia that the bank would be seized last Monday if a deal wasn't reached
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 1:41 AM » Mall Vacancies Grow
    Published Mon, Oct 06 2008 1:41 AM by WSJ
    Vacancy rates at U.S. malls and shopping centers continued their steep rise in the third quarter. The apartment market remained healthy.
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